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Innocence is no defense: case spotlights the burden on the owner

The U.S. Court of Appeals for the Second Circuit, in United States v. Davis, No. 10-300-cv, --- F.3d ----, 2011 WL 2162897 (2d Cir. June 3, 2011), recently upheld the civil seizure by the United States of a Camille Pissarro monotype stolen nearly thirty years ago from a French museum. In so doing, the court rejected the claimant’s defense that she was an “innocent owner” entitled to retain the monotype because she had no knowledge that the work was stolen when she bought it. Purchasers of art should take heed of several important reminders from this case about the critical importance of confirming and preserving records of an artistic work’s provenance before purchase.

BACKGROUND

Le Marché, by Camille Pissarro, was stolen from the Musée Faure in Aix-les-Bains in France on November 16, 1981. The artwork was imported to San Antonio, Texas, where an Emile Guelton consigned it to J. Adelman Antiques and Art Gallery. That gallery’s proprietor sold it in turn to the Sharan Corporation, an entity once partially controlled by the claimant in the case, Sharyl R. Davis. Davis eventually undertook to sell the work at Sotheby’s, at which point the French National Police became aware of the impending sale. The item was withdrawn from auction at the request of the Department of Homeland Security, and the French police gathered additional information about the theft, including the identification of Guelton as the thief by a security guard. The U.S. government filed a complaint for civil forfeiture against Davis in the Southern District of New York in 2006.

THE DAVIS CASE

The United States sought forfeiture primarily under 19 U.S.C. § 1595a, a customs statute which authorizes the forfeiture of merchandise introduced into the United States “contrary to law…if [it] is stolen, smuggled, or clandestinely imported or introduced.” 19 U.S.C. § 1595a(c)(1)(A). The government contended that a violation of the National Stolen Property Act, 18 U.S.C. § 2314, 2315 (the “NSPA”) justified a finding that the Pissarro work was introduced “contrary to law.” The government additionally sought forfeiture under 18 U.S.C. § 981 (justifying forfeiture of property “derived from proceeds traceable to a violation of . . . any offense constituting a ‘specified unlawful activity’”—namely, an NSPA violation).

The government and Davis both moved for summary judgment, both arguing that the undisputed facts entitled each to title to the Pissarro work. The government moved only on its customs claim (19 U.S.C. § 1595a), while Davis argued that another federal statute, 18 U.S.C. § 983(d), excluded the Pissarro work from all of the government’s claims because it states that “[a]n innocent owner’s interest in property shall not be forfeited under any civil forfeiture statute.” The District Court held that Davis was entitled to summary judgment on the NSPA claim because she was an innocent purchaser. The government did not appeal that part of the judgment.

With respect to the remaining claims, however, Davis was unsuccessful. The Second Circuit held that a NSPA violation—the importation of stolen property—qualified as an act “contrary to law,” that the undisputed facts showed that the work met the threshold value requirement of $5,000, and that as stolen property when it entered the United States, the circumstances surrounding Le Marché were sufficient to invoke 19 U.S.C. § 1595a.

The Second Circuit then turned to the two critical questions: whether an innocent purchase could defeat civil forfeiture under the customs statute, and, if so, who carried the burden of proof to show whether the art work was or was not stolen. First, the court found that the “civil forfeiture statute” that allows an innocent-owner defense does not extend to “the Tariff Act of 1930 or any other provision of law codified in title 19”—including 19 U.S.C. § 1595a. Thus, as a matter of plain statutory language, Davis could not defeat the forfeiture of Le Marché by showing that she took possession as a good faith purchaser.

The Court of Appeals then affirmed that in a civil forfeiture case the claimant, not the government, must prove that the object was not stolen. Relying on the procedural differences between a civil forfeiture action until Title 19, which is brought against the property, (i.e., Le Marché ) and a proceeding against an individual (i.e., Davis) under Title 18, the court reasoned that the burdenshifting provisions of Title 18 and its innocent purchaser defense did not apply to claims under Title 19. Davis therefore was required, as part of her defense, to prove that Le Marché was not stolen, which she was unable to do.

EFFECT ON OWNERS AND PURCHASERS

This decision is a recent and powerful reminder of the thorny and important issues concerning provenance that collectors, dealers and museums must address when dealing with cultural objects that originate or have been owned abroad. Specifically, the Davis decision is a reminder of the continued importance of provenance research, not just for wartime restitution claims that receive more media attention, but for any object which has been owned in another country. Prospective buyers should be doubly certain of the ownership history, and should think of ways to protect themselves against discoveries that even thorough research could not have detected. That research may not save the acquisition later, but it is a critical piece of due diligence that may be overlooked after concerns about wartime seizure are resolved. The case is a reminder that every link in the provenance chain is critical, no matter when or where. Second, when faced with a claim to a cultural object, owners must take into account the onerous burden of proof that they will face to resist seizure and preserve their files relating to their investigation into the provenance of the work. It may well be worth the fight, but a realistic perspective on the chances is critical in making an informed decision.

Compare jurisdictions:Litigation: Enforcement of Foreign Judgments

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